The world’s biggest investor just downgraded stocks around the globe

In a note out on Tuesday, Richard Turnill, global chief investment strategist at BlackRock – the world’s largest investor with over $4 trillion in assets under management – cut his rating on global stocks “following a meeting of the BlackRock investors behind our views.”

Turnill said that the likelihood of further interest-rate increases from the Federal Reserve – as well as the potential for a Brexit (the UK voting to leave the European Union), a slowdown in global growth, and a worsening of the European migrant crisis this summer – all pose a risk to stocks in the short-term.

And with US stocks sitting around the 70th percentile of their long-term historical range – meaning that just 30% of the time US stocks have been more expensive on a valuation basis – and because of this elevated historical valuation, Turnill sees stocks as particularly vulnerable to economic shocks related to any or all of these risks.

With this call, Turnill follows Goldman Sachs as a prominent investment strategist turning more cautious on stocks after a drop and recovery to start the year put markets in the US back near all-time highs.

In its report, Goldman said that until earnings growth rebounded, stocks didn’t look good on a risk-adjusted basis.

Turnill follows a similar line of thinking, writing that there is potential for a corporate-earnings recovery later this year and saying that evidence of inflation picking up along with expanded fiscal policy – instead of a continuing emphasis on easy monetary policy – would make BlackRock more bullish on stocks.